7 Investments accounted for using the equity method

Deutsche Telekom publishes the following information on significant investments included in the consolidated financial statements using the equity method:

Deutsche Telekom share

Percentage of voting rights

Assigned to segment

Fair value of the investment,
if a listed market price is available

Name and registered office

Dec. 31, 2017 %

Dec. 31, 2016 %

Dec. 31, 2017 %

Dec. 31, 2016 %

Dec. 31, 2017
millions of €

Dec. 31, 2016
millions of €

Hrvatske telekomunikacije d.d. Mostar, Mostar, Bosnia-Herzegovina a

39.10

39.10

39.10

39.10

Europe

31

31

Scout24 AG, Munich, Germany

‒

9.26

‒

9.26

Group Development

‒

337

Ströer SE & Co. KGaA, Cologne, Germany b

11.60

11.60

11.60

11.60

Group Development

395

267

T-Mobile USA Tower LLC, Wilmington,
United States c

100.00

100.00

100.00

100.00

United States

‒

‒

T-Mobile West Tower LLC, Wilmington,
United States c

100.00

100.00

100.00

100.00

United States

‒

‒

Toll Collect GmbH, Berlin, Germany

45.00

45.00

45.00

45.00

Systems Solutions

‒

‒

a Indirect shareholding via Hrvatski Telekom d.d., Croatia (Deutsche Telekom AG’s share: 51.00 percent).b Sale of shares with accounting effect as of June 23, 2017 (please also refer to the information provided in the section “Summary of accounting policies” under “Changes in the composition of the Group and other transactions.” c Indirect shareholding via T-Mobile US, Inc., United States (Deutsche Telekom AG’s share: 62.29 percent).

Description of the nature of the activities of the joint arrangement or associate Hrvatske telekomunikacije d.d. (HT Mostar d.d.) provides mobile and fixed-network communications services in Bosnia-Herzegovina.

Ströer SE & Co. KGaA is a leading digital multi-channel media house that offers advertisers customized, fully integrated premium communications solutions. Deutsche Telekom holds 11.6 percent of the shares in Ströer SE & Co. KGaA. In addition, Deutsche Telekom is represented by two of the six members on the supervisory board of Ströer SE & Co. KGaA. This representation comprising a third of all seats on the supervisory board gives Deutsche Telekom a significant influence on the financial and operating policies of Ströer SE & Co. KGaA. Consequently, Deutsche Telekom includes the investment in its consolidated financial statements as an associate using the equity method.

T-Mobile USA Tower LLC and T-Mobile West Tower LLC are structured entities founded by T-Mobile US in each of which it holds a 100-percent stake for the purpose of contributing cell sites in accordance with a framework agreement signed in 2012 between T-Mobile US and Crown Castle International Corp., Houston, United States, concerning the leasing and use of the cell sites. The sole right to continue to use and lease out these sites was transferred to Crown Castle. T-Mobile US continues to operate its mobile equipment on these cell towers and, to this end, leases back the required capacity from Crown Castle. Previously unused infrastructure is thus available for Crown Castle to lease to third parties. In return, the owners of the land on which the cell towers are built will no longer receive lease payments from T-Mobile US for those cell towers which were contributed to the two associates and those that were disposed of. Both entities were deconsolidated as of the date of the closing of the transaction in 2012, because Crown Castle independently operates the cell sites, generates revenues from the lease out of the sites for an average of 27 years and determines the finance and business activities of both entities that are relevant for consolidation purposes. It is expected that the leasing of tower space will allow Crown Castle to generate sufficient ongoing profits and cash flows to be able to meet its contractual obligations. Thus Deutsche Telekom has only a ­significant influence and includes these companies in the consolidated financial statements as associates. Under certain conditions, T-Mobile US will continue to be held liable for any default in the lease payment by Crown Castle to the owners of the underlying land of the cell sites. The agreement includes a considerably low maximum guarantee amount for Deutsche Telekom, since in the unlikely event that this case occurs, T-Mobile US could take over the further use of the relevant cell sites or alternatively terminate the contracts with the owners of the cell site land at short notice. At closing, T-Mobile US established an immaterial cash reserve in the entities sufficient to fund the payment of ongoing administrative expenses not payable by Crown Castle. Aside from the guarantee and the payment of administrative expenses there is no other funding obligation by T-Mobile US.

Toll Collect GmbH operates the highway toll system for trucks in Germany.

The following tables provide summarized financial information on the main companies included in the consolidated financial statements and accounted for using the equity method. The data is not based on the stakes attributable to Deutsche Telekom AG, but represents the shareholdings on an assumed 100-percent basis.

Summarized financial information on the main joint ventures accounted for using the equity method

Summarized financial information on significant associates accounted for using the equity method

millions of €

Ströer SE & Co. KGaA a

T-Mobile USA Tower LLC

T-Mobile West Tower LLC

Dec. 31, 2017/2017

Dec. 31, 2016/2016

Dec. 31, 2017/2017

Dec. 31, 2016/2016

Dec. 31, 2017/2017

Dec. 31, 2016/2016

Current assets

335

293

0

0

0

0

Non-current assets

1,542

1,416

60

68

91

104

Current liabilities

477

438

0

0

0

0

Non-current liabilities

786

642

0

0

0

0

Net revenue

910

766

0

0

0

0

Profit (loss)

52

40

0

0

0

0

Other comprehensive income

(8)

(6)

0

0

0

0

Total comprehensive income

44

34

0

0

0

0

Dividends paid to Deutsche Telekom

7

4

0

0

0

0

a As financial data of Ströer SE & Co. KGaA as of December 31, 2017 was not publicly available to Deutsche Telekom at the date of preparation, the quarterly statement of Ströer SE & Co. KGaA as of September 30, 2017 was used as a basis for the summarized financial information.

Reconciliation to the carrying amount included in the consolidated statement of financial position

millions of €

HT Mostar d.d.

Toll Collect GmbH

2017

2016

2017

2016

Net assets as of January 1

170

173

(67)

(128)

Profit (loss)

0

(2)

97

61

Other comprehensive income

0

0

0

1

Dividends paid

0

0

0

0

Exchange rate effects

(2)

(1)

0

0

Net assets as of December 31

168

170

30

(67)

Share of net assets attributable to Deutsche Telekom as of December 31

66

66

10

(34)

Adjustment of carrying amount

0

0

0

34

Other reconciliation effects

(15)

(16)

0

0

Carrying amount as of December 31

51

50

10

0

millions of €

Ströer SE & Co. KGaA a

T-Mobile USA Tower LLC

T-Mobile West Tower LLC

2017

2016

2017

2016

2017

2016

Net Assetsas of January 1

629

286

68

66

104

101

Profit (loss)

71

73

0

0

0

0

Other comprehensive income

0

1

0

0

0

0

Dividends paid

(61)

(39)

0

0

0

0

Capital increase

3

380

0

0

0

0

Obligation to acquire own equity instruments

(9)

(72)

0

0

0

0

Exchange rate effects

(19)

0

(8)

2

(13)

3

Net assets as of December 31 b

614

629

60

68

91

104

Share of net assets attributable to Deutsche Telekom as of December 31 b

71

73

60

68

91

104

Adjustment of carrying amount

0

0

0

0

0

0

Reversal of impairment loss/(impairment loss)

50

(50)

0

0

0

0

Other reconciliation effects

194

248

0

0

0

0

Carrying amount as of December 31

315

271

60

68

91

104

a As financial data of Ströer SE & Co. KGaA as of December 31, 2017 was not publicly available to Deutsche Telekom at the date of preparation, the quarterly statement of Ströer SE & Co. KGaA as of September 30, 2017 was used as a basis for the summarized financial information and for the reconciliation statement to the carrying amount reported in Deutsche Telekom’s consolidated statement of financial position. The resulting effects for the extrapolation of the carrying amount as of December 31, 2017 were estimated and are included under other reconciliation effects. In addition, profit/loss after income taxes also includes profit/loss after income taxes of the prior-year fourth quarter on a pro rata basis.b The figures for net assets and the share of the net assets of Ströer SE & Co. KGaA relate to September 30, 2017 and September 30, 2016 respectively.

Deutsche Telekom did not recognize losses in 2017 in connection with investments included in the consolidated financial statements using the equity method. In 2016, losses of EUR 34 million were not recognized, because Deutsche Telekom has no obligation to offset these losses.

Summarized aggregate financial information on non-significant investments accounted for using the equity method The figures relate to the interests attributable to Deutsche Telekom.